Financial Results for the Third Quarter Ended July 31, 2018
[Japan GAAP] (Consolidated)
Date:

August 31, 2018

Company Name and Code:

Tomoe Engineering Co., Ltd. and Subsidiaries - 6309
(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:5-15, Kitashinagawa 5-chome, Shinagawa-ku, Tokyo, Japan

President:

Hitoshi Yamamoto

Investor Relations Contacts:

Toshiaki Yakura, Director, General Manager of Accounting Division, Tel: (03) 3442-5127

Date to report Quarterly Consolidated Financial Statement: September 11, 2018
Date for Dividend Payment:

Not applicable to this financial quarter

Preparation of Supplementary Explanatory Materials for Quarterly Operating Results: Not preparedBriefing Session for Quarterly Operating Results: Not planned* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Data for the Third Quarter Ended July 31, 2018
(1) Results of Operation (Consolidated)

Quarter Ended July 31, 2018
Quarter Ended July 31, 2017

(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions ofYen
Percent
Yen
Percent
Yen
Percent
30,435
3.5
1,568
17.9
1,580
18.6
29,393
3.6
1,330
21.9
1,332
46.4

Quarter Ended July 31, 2018
Quarter Ended July 31, 2017

Net Income Attributable toOwners of the Parent
Millions ofYen
Percent
1,043
20.9
863
95.4

Net Income per Share

Fully Diluted Quarterly
Net Income per ShareYen
104.58
86.53

Yen－－(Note) Comprehensive income
Third Quarter ended July 31, 2018: 1,057 million yen (-14.2%)

Third Quarter ended July 31, 2017: 1,232 million yen (－%)

(2) Financial Condition (Consolidated)

Quarter Ended July 31, 2018Year Ended October 31, 2017

Total Assets (A)(Millions of Yen)
37,08536,580Net Assets (B)(Millions of Yen)
27,61727,008Net Assets Ratio(B) / (A) (Percent)
74.5
73.8

(Reference) Net assets
Third Quarter ended July 31, 2018: 27,617 million yen

Year Ended October 31, 2017: 27,008 million yen

2. Dividend Status(Record Date)
Year Ended October 31, 2017
Year Ending October 31, 2018Year Ending October 31, 2018(Prospect)FirstQuarter－－Interim
Term
22.50
22.50

Annual Dividend (Yen)
ThirdEnd ofQuarter
Fiscal Year
22.50－－
22.50(Note) Revisions since the most recently released dividend projection: None

Annual45.00
45.00

3. Forecast for Earnings for the Year Ending October 31, 2018 (Consolidated)(Percent change from the previous Full Business Year)Net Sales
Operating Income
Ordinary Income(Millions of Yen) (Percent) (Millions of Yen) (Percent) (Millions of Yen) (Percent)
Full Business Year
43,000
4.6
2,190
-0.4
2,200-0.9
Net Income Attributable to Net Income per ShareOwners of the Parent(Millions of Yen) (Percent)
Yen
Full Business Year
1,490-0.9149.32(Note) Revisions since the most recently released dividend projection: NoneNotes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
Number of new subsidiaries: __(Company names):
Number of eliminated subsidiaries: __(Company names):(2) Adoption of simplified accounting method and the specific accounting method: None
(3) Changes of the principles, procedures, and representation of the accounting policies
1) Change due to revision of accounting standard: None
2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
(4) Number of outstanding shares (Common stock)1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At July 31, 2018: 10,533,200 shares

At October 31, 2017: 10,533,200 shares

2) Number of treasury stocks as of quarter-end and year-end
At July 31, 2018: 554,861 shares

At October 31, 2017: 554,817 shares

3) Number of average shares (accumulated quarterly total)
At July 31, 2018: 9,978,378 shares

At July 31, 2017: 9,978,431 shares*The quarterly earnings report is exempt from the quarterly review by certified public accountant or audit firm..
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could
differ materially due to various factors.
Please refer to the Financial Results for the Quarter (Attachments) on page 3, (3) [Analysis of Future Forecast onConsolidated Earnings Forecast] of 1. [Qualitative Information on Quarterly Consolidated Operating Results] for theoperating results forecast.

Table of Contents (Supporting Data)

1. Qualitative Information on Quarterly Consolidated Operating Results...................................................................2(1) Analysis of Operating Results................................................................................................................................2(2) Analysis of Financial Condition..............................................................................................................................3(3) Analysis of Future Forecast on Consolidated Earnings Forecast.......................................................3
2. Quarterly Consolidated Financial Statement and Notes.................................................................................................4(1) Quarterly Consolidated Balance Sheet. ................................................................................................4(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
Income......................................................................................................................................6Quarterly Consolidated Statements of Income.....................................................................................................6Quarterly Consolidated Statements of Comprehensive Income.........................................................................7(3) Notes on Quarterly Consolidated Financial Statements……………………………………………………….. 8(Note for premise of going concern)…………………………………………………………………..……8(Notes for significant changes in shareholder’s equity)………………………………………….…………… 8(Segment information) …………………………………………………………………………………………... 81

1. Qualitative Information on Quarterly Consolidated Operating Results(1) Analysis of Operating Results
During the third quarter consolidated year-to-date period, Japan’s economy maintained its gradual recovery trend
sustained by briskly moving exports and a shift towards rising personal consumption, as the steady pace of capital
investment continued as well, despite a slowdown in momentum recognized during the second quarter. On theother hand, while conditions overseas improved steadily as a whole against the backdrop of the U.S. economy’s
ongoing expansionary trend, Europe’s gradual economic recovery, and the brisk Asian economic picture including
China, circumstances such as the imposition of tariffs by the United States and the retaliatory response by China andthe EU, the depreciation of newly developing country currencies, and higher oil prices made close observationnecessary.
Given these circumstances, net sales for the Tomoe Engineering Group for the third quarter consolidated
year-to-date period increased 3.5% from the same period last year to 30,435 million yen because of increasing
sales in both the Machinery & Equipment Business and Chemical Products Business. From an earnings
aspect, operating income was 1,568 million yen, 17.9% up from the same period last year because of higher
income in both the Machinery & Equipment Business and Chemical Products Business, while ordinary income
came to 1,580 million yen, 18.6% up from the same period last year. Net income attributable to owners of theparent was 1,043 million yen, 20.9% up from the same period last year.
Operating results by segment were as follows.
(Machinery & Equipment Business)
In the Machinery & Equipment Business, net sales of components and repair services for domestic public sector
demand, and net sales of the whole products and services for domestic private sector demand, and machinery,equipment and works for overseas markets increased. As a result, net sales for the third quarter consolidated
year-to-date period were 7,184 million yen, 9.4% up from the same period last year.
From an earnings aspect, operating income was 174 million yen, 197.3% up from the same period last year,
because of increased profit from all sections of the high-margin components and repair services, and machinery,equipment and works.
(Chemical Products Business)
In the Chemical Products Business, net sales of materials for motor vehicles, housing and construction applications in
the industrial materials sector, transport materials for semiconductor manufacturing applications in the electronics
materials sector, and net sales of businesses based in Hong Kong and Thailand all were robust. As a result, net
sales for the third quarter consolidated year-to-date period were 23,250 million yen, 1.9% up from the same period
last year.
With respect to earnings, operating income was 1,393 million yen, 9.6% up from the same period last year, driven by
the growth in net sales for products in the industrial materials sector and the electronics materials sector which had
comparatively high margins, and the advanced materials sector which improved profitability.

2(2) Analysis of Financial Condition
Total assets as of the end of the consolidated third quarter under review were 37,085 million yen, up 1.4% or 504
million yen from the end of the previous consolidated fiscal year. This mainly reflected a decrease of 2,144 million
yen in notes and accounts receivable-trade, and an increase of 823 million yen in electronically recorded monetaryclaims, an increase of 618 million yen in cash and deposits, an increase of 592 million yen in merchandise andfinished goods, and an increase of 519 million yen in work in process.
Liabilities were 9,467 million yen, up 1.1% or 104 million yen from the end of the previous consolidated fiscal year,
mainly because of an increase of 270 million yen in advances received, an increase of 149 million yen inelectronically recorded monetary debt, and an increase of 145 million yen in notes and accounts payable-trade, adecrease of 389 million yen in income tax payable, and a decrease of 354 million yen in provision for Bonuses.
Net assets stood at 27,617 million yen, 608 million yen or 2.3% up from the end of the previous consolidated fiscal
year, mainly because of an increase of 594 million yen in retained earnings.
As a result of the above changes, the equity ratio at the end of the consolidated third quarter under review
increased by 0.7 points compared with the end of the previous consolidated fiscal year to 74.5%.
(3) Analysis of Future Forecast on Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast figures for the fiscal year ending October 31, 2018 thatwere announced in the “Notice on changes in earnings forecast” released on May 29, 2018.

3

2. Quarterly Consolidated Financial Statement and Notes(1) Quarterly Consolidated Balance Sheets (Third Quarter)(Thousands of Yen)
End of Previous YearEnd of Third Quarter(October. 31, 2017)(July 31, 2018)

AssetsCurrent Assets
Cash and Deposits

7,893,336

8,511,385

Notes and Accounts Receivable-Trade12,423,898

10,279,382

Electronically Recorded Monetary Claims

1,823,085

2,646,822

Merchandise and Finished Goods

3,045,330

3,638,130

Work in Process

1,121,215

1,641,126

Raw Materials and Supplies

626,777

950,154

Deferred Tax Assets

551,335

424,969

Others169,602

212,094-5,793-30,963

27,648,788

28,273,103

4,447,596

4,451,240

Accumulated Depreciation-1,714,451-1,798,948

Buildings and Structures, Net

2,733,144

2,652,292

Machinery, Equipment and Vehicles

3,753,847

3,693,592-3,339,171-3,296,411

414,676

397,180

1,931,034

1,930,885－

14,626

999,146

979,600-914,964-897,408

84,181

82,191

5,163,038

5,077,176

186,343

140,167

Investment Securities

1,520,735

1,517,389

Guarantee Deposits

293,537

292,110

1,693,578

1,714,184

Others101,325

94,488

Allowance for Doubtful Accounts-26,386-23,425

3,582,791

3,594,747

Total Noncurrent Assets

8,932,172

8,812,090

Total Assets

36,580,961

37,085,193

Allowance for Doubtful Accounts
Total Current Assets
Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net
Land
Construction in progress
Others
Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

Net Defined Benefit Assets

Total Investments and Other Assets4

(Thousands of Yen)
End of Previous YearEnd of Third Quarter(October. 31, 2017)(July 31, 2018)

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade

4,090,419

4,235,512

Electronically Recorded Monetary Debt

1,665,615

1,815,510

Accounts Payable-Others

520,046

586,479

Income Taxes Payable

437,430

47,774

Advances Received

57,481

327,816

Provision for Bonuses

982,841

628,452

Provision for Directors' Bonuses

64,67847,918

Allowance for Product Warranty

185,258

110,090

Others

189,552

293,983

8,193,325

8,093,539

5,460

5,460

57,49860,0041,315,959

1,308,891

Total Noncurrent Liabilities

1,378,918

1,374,356

Total Liabilities

9,572,243

9,467,895

Capital Stock1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

23,889,646

24,484,111-363,876-363,977

Total Shareholders’ Equity

26,070,389

26,664,754

Accumulated Other Comprehensive Income
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

551,039536,247

2,508

883

Foreign Currency Translation Adjustment

214,564

194,015

Total Adjustment on Net Defined Benefit

170,216

221,397

Total Accumulated Other Comprehensive Income

938,328

952,544

Total Net Assets

27,008,718

27,617,298

Total Liabilities and Net Assets

36,580,961

37,085,193

Total Current Liabilities
Noncurrent Liabilities
Provision for Directors' Retirement Benefits
Net Defined Benefit Liabilities
Deferred Tax Liabilities

Net Assets
Shareholders’ Equity

Treasury Stock5

(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
IncomeQuarterly Consolidated Statements of Income (Third Quarter)(Thousands of Yen)
Third Quarter Ended

Third Quarter Ended

July 31, 2017
29,393,184

July 31, 2018
30,435,173

23,184,857

23,739,674

6,208,326

6,695,499

4,878,126

5,127,4241,330,199

1,568,074

Interest Income

1,170

2,253

Dividends Income

25,93229,819Rent Income

5,123

5,463

Others15,451

29,87347,67867,410Interest Expenses

14,50821,690Commission Paid

8,243

8,243

Sales Discount

4,628

4,347

Foreign Exchange Losses

12,84718,755

Others

5,273

2,381

Total Non-Operating Expenses

45,502

55,418

Ordinary Income

1,332,376

1,580,066

Gain on Sales of Investment Securities

8,524

－

Total Extraordinary Income

8,524

－

1,340,900

1,580,066

Income Taxes-Current

391,667

433,110

Income Taxes-Deferred

85,788103,463

Total Income Taxes

477,455

536,574

Net Income
Net Income
Attributable to Owners of the Parent

863,444

1,043,492

863,444

1,043,492

Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

Extraordinary Income

Income before Income Taxes

6Quarterly Consolidated Statements of Comprehensive Income (Third Quarter)(Thousands of Yen)
Third Quarter Ended

Third Quarter Ended

July 31, 2017
863,444

July 31, 2018
1,043,492

Valuation Difference on Available-for-sale Securities

192,994-14,791

Deferred Gains or Losses (-) on Hedges

17,767-1,624Foreign Currency Translation Adjustment

93,591-20,549

Adjustment on Net Defined Benefit

65,131

51,180Total Other Comprehensive Income

369,484

14,2151,232,929

1,057,708

1,232,929

1,057,708

Net Income
Other Comprehensive Income

Comprehensive Income(Breakdown)Comprehensive Income Attributableto Owners of the Parent

7

(3) Notes on Quarterly Consolidated Financial Statements(Note for premise of going concern)
There are no pertinent matters to report.
(Notes for significant changes in shareholder’s equity)
There are no pertinent matters to report.
(Segment Information, etc.)[Segment Information]
I Third Quarter Ended July 31, 2017
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

6,566,765

Total

Grand Total

22,826,418

29,393,184

29,393,184－－－－

6,566,765

22,826,418

29,393,184

29,393,184

58,734

1,271,464

1,330,199

1,330,199(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

II Third Quarter Ended July 31, 2018
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

7,184,407

Total

Grand Total

23,250,765

30,435,173

30,435,173－－－－

7,184,407

23,250,765

30,435,173

30,435,173

174,646

1,393,428

1,568,074

1,568,074(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

8